The mobile phone industry is plagued by
a number of issues that are common between all major providers. One
of the biggest of these issues is that fact that inside some homes
and offices the mobile signal is not strong enough to provide a
consistent call quality for mobile users.

The lack of a
consistent signal inside the office or home means that users
experience dropped calls and slower data speeds. The answer to this
problem seemed to be femtocells. A femtocell is a small device that
looks similar to a router for internet access that picks up the
wireless call and sends it over the user's broadband network rather
than the mobile phone network.

Femtocells were also looked at
as a way for mobile network operators to improve speeds and reduce
the overall load on their networks. The reality is that femtocells
have been deployed in much lower numbers than was predicted by
analysts and mobile providers.

ABI Research today issued
a notice that it had reduced the expected number of femtocells
that will ship this year by 55%. The research firm blames the
reduction in its estimates on the fact that mobile operators have
been slower to adopt the technology than expected. ABI now estimates
that 350,000 femtocells will have been shipped by the end of the
year.

ABI's Aditya Kaul said, "Even femtocell vendors are
a bit surprised that the operators haven’t pushed femtocells as
much or as soon as expected. We expect that deployments in 2010 will
pick up but will be slower than expected – our data suggests about
a 40% reduction on previous estimates."

As for why
carriers are slow to adopt the technology the reason is unclear. ABI
reports that some feel femtocells have yet to prove their worth.
Others believe that the poor economy is contributing to the slow
adoption. The economy is a good reason. Femtocells require users to
pay more each month to provide better signal. A strong signal is
something that many users expect their carrier to provide for the
money they already pay each month.

Kaul said, "We still
believe in this market’s potential. We anticipate that by 2014,
shipments will only be about 10% lower than our previous estimates.
The drivers are real, but it will take longer than anticipated. Next
year will be critical: if conditions don’t improve by the end of
2010, some smaller vendors may find themselves in trouble."

ABI
reported in March that femtocell
deployment was slow due to the economy. At the time, the number
of femtocells shipped was expected to climb to over a million units
in 2010.

The launch of femtocells from Verizon
was expected to happen
in 2008, which never really materialized. Verizon then reported
that it would launch
femtocells in early 2009 along with handsets that would support
Femtocells. Verizon is currently offering femtocells to its customers
for an extra $10 to $20 per month added to the phone bill.

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